Soups Heat Up for Campbell’s as Snacks Grow Stale
Snacks now make up around half of the historic soup company’s sales, up from less than a third a decade ago.
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When the going gets tough, the tough get “Cream of Mushroom” soup. Sales for Campbells jumped nearly 5% last quarter, led by 15% growth in the meals division that sells canned soups and sauces. That countered an 8% decline in the snacks segment as consumers stocked up on staples instead of Snyder’s pretzels.
Still, Campbell’s guidance for the year is guarded. The 155-year-old company is anticipating tariffs that would hurt its sales to Canada and hinder demand for products made with imported materials, like its steel soup cans.
The Snack That Isn’t Smiling Back
Snacks like Goldfish and Pepperidge Farm cookies became such a large portion of Campbell’s sales that the 155-year-old company last year said, “Drop the ‘soup,’ it’s cleaner.” Snacks now make up around half of its sales, up from less than a third a decade ago.
But as people fret over the economy, they’re skipping Goldfish to make green bean casserole:
- “Consumers are cooking at home at the highest levels since early 2020,” the CEO of Campbell’s said yesterday. That’s a stark comparison, considering how few dining options there were in 2020. Costco started to see the same trend late last year, when its finance chief noted a shift toward making food at home had boosted meat and produce sales. In the most recent quarter, Costco sales beat expectations.
- Sixty-nine percent of diners told KPMG they’re eating at home more often, with 85% saying they’re skipping restaurants to save money. They expect to spend 7% less monthly on restaurants this summer. At the same time, consumer sentiment measured by the University of Michigan is hovering near record lows.
Balanced Meals: Campbell’s 50/50 sales split between snacks and meals sets it up to handle shifting consumer habits. During uncertain economic times, shoppers skip chips and cookies for homemade meals. And when they’re feeling more flush, they splurge on snacks. Campbell’s meals division is also being boosted by its acquisition last year of Sovos Brands, whose main product, Rao’s pasta sauce, has quickly become a bestseller for Campbell’s. But looking ahead, it’ll be a balancing act for food brands to keep their prices low enough for budget-conscious shoppers while still offsetting the impact of tariffs.
